Blackstone to acquire €3.8bn Finnish investment platform

The New York private equity real estate giant has agreed to takeover Helsinki-listed real estate investment company Sponda for €5.19 per share.

Blackstone, the New York-listed alternative investment behemoth, made a takeover offer for Helsinki-listed real estate investment company Sponda.

Sponda specializes in commercial properties in the largest cities in Finland. As at March 31, 2017, the fair value of Sponda’s investment properties was approximately €3.8 billion and the leasable area was approximately 13 million square feet.

Blackstone has reached a “combination agreement” with Sponda to purchase all issued and outstanding shares in the company for €5.19 for each, representing an aggregate equity purchase price of approximately €1.76 billion.

However, under the agreement Sponda has the right to distribute a dividend of a maximum of €0.12 per share before the completion of the transaction. The offer price will be adjusted downwards on a euro-for-euro basis if a dividend were to be distributed.

Stockholm-based private equity real estate firm, Areim, will partner Blackstone in the deal and co-investing approximately 10 percent of the capital.

“Our proposed acquisition represents another step in Blackstone’s long-standing strategy of investing in high-quality real estate assets and businesses across the Nordic region,” commented James Seppälä, head of European real estate acquisitions at Blackstone.

The bid represents a premium of 28.1 percent to the three-month volume-weighted average price of Sponda shares on Nasdaq Helsinki.

The board of directors of Sponda has unanimously decided to recommend to shareholders of Sponda to accept the offer. The largest shareholders Sponda Mercator Invest, HC Fastigheter and Varma Mutual Pension Insurance Company as well as Sponda’s President and chief executive Kari Inkinen, together representing approximately 46.9 percent of the shares, have irrevocably undertaken to accept the offer.

Blackstone has said it does not expect any immediate material effects on Sponda’s operations or the position of Sponda’s management or employees as a result of the offer.

“We are excited about this opportunity to invest in the commercial real estate market in Finland and are delighted with the strong support that our offer has received from Sponda's board, management and leading shareholders,” added Seppala.

JLL acted as the corporate real estate adviser to Blackstone on this deal.

The Nordic push is not Blackstone’s first large platform deal in the region. In December 2015, the firm took control of Certeum, a Helsinki-based logistics and industrial property investment company, after acquiring a 50 percent stake in the company from Varma Mutual Pension Insurance Company.